Gold Stocks and Bullion Potentially Form a Bottom

Author Larry Berman

Posted: 2 Apr 2012 re-posted from etfcm

The price action in the gold stocks and bullion in the past few weeks looks like a bottom formation. While we never know for sure without the benefit of hindsight, it does make sense to have exposure in the sector towards the higher end of maximum. But make no mistake, that the issues plaguing the gold sector in terms of political, labour violations, exponential rising costs, funding pressures, are all having a material impact on near-term valuations.

One industry report still looks to value revenues in the $1300 area, which is bordering on absurd. There is a group of analysts that are fist pounding bullish because of this perceived mispricing and yet the Street can’t seem to value these things at more than $1300 gold. Talk about a conundrum.

The bottom line is that governments around the world are bankrupt (fiscally and morally in many cases) and the only palatable way out is to print money and monetize the debt, because the longer-term fiscal (and moral) problems are simply TOO BIG TO SOLVE! Buy gold wear diamonds!


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